Communication Service Providers (CSPs) face a constant battle against scammers who threaten customer trust, brand reputation, and financial stability. In this blog, we will discuss the impact of telecom fraud on CSPs, common scam types, and CSP fraud protection strategies, including examples.
In this article, we will discuss:
Scammers and their telecom fraud can wreak havoc on CSPs in several ways, including customer trust erosion, brand reputation damage, regulatory penalties, potential legal liabilities, degraded QoE, direct revenue loss, degraded customer experience, increased fraud prevention costs, and increased billing disputes. Fraudulent traffic is projected to cost the international wholesale carrier industry $17 billion annually, according to industry reports.
In but one of many examples, the U.S. Department of Justice sued AT&T for up to $48 million allowing a service for the deaf to become overrun by scam artists — estimating that at one point 95% of the calls for a particular service were not legitimate.
Types Of Scams Targeting CSPs And Their Customers
Common scams that target CSPs and their customers include phone call impersonation, phone fraud, domain and social media impersonation, phishing/vishing scams, and robocalls. In their 2021 survey, The Communications Fraud Control Association (CFCA) estimated the total amount of telecom revenue loss due to fraud at 2.2% of revenues or $40 billion, an increase over 2019 of well over $11 billion. Spoofing alone cost CSPs an estimated $2.63 billion.
One nefarious scam that has hit CSPs hard — and which has increased dramatically in frequency — is called the “port-out” scam. With a date of birth and Social Security Number, scammers trick CSPs into transferring (porting) a number to a new account or device. Those scammers then steal the identity and commit a variety of other fraud using the existing number (on a new device) for 2-factor authentication.
Another notorious case of robocall scams involved 2 men who collectively were responsible for up to 5 billion (yes, billion) robocalls within a 3-month period. They was ultimately stopped — with $225 million fine against two telemarketers for their involvement — but not before those billions of calls degraded legitimate network traffic for CSPs. In addition, companies that passed on their calls in the future were warned by the FCC of consequences.
Strategies For CSP Fraud Protection: Protect Your Customers And Brands From Scammers
CSP Fraud Protection strategies are required to safeguard your customers, as well as your organization itself. Robust authentication and verification methods, monitoring call and message traffic, collaborating with specialized brand protection services like YouMailPS, and customer education on identifying and reporting scams are essential steps. AI and machine learning can also play a crucial role in detecting and preventing scams.
Additional ways for CSPs reduce fraudulent traffic include:
Scammers pose a significant threat to Communication Service Providers and their customers. By understanding the impact of scams and common scam types, CSPs can develop effective strategies to protect their customers and brands. Leveraging advanced technologies and partnering with specialized services like YouMailPS can help CSPs combat scammers and maintain customer trust.
Ensure the safety and security of your customers and brand by eradicating scammers. Contact YouMailPS for a no-obligation consultation on comprehensive scam protection solutions for Communication Service Providers.